Is Riddhi Steel overvalued or undervalued?

Aug 27 2025 08:06 AM IST
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As of August 26, 2025, Riddhi Steel is fairly valued with a PE ratio of 9.96, strong growth potential indicated by a PEG ratio of 0.17, and solid operational efficiency reflected in its ROCE of 10.65% and ROE of 13.26%, despite a year-to-date return of -28.57% compared to the Sensex's 3.39%, while showing a remarkable three-year return of 203.53%.
As of 26 August 2025, Riddhi Steel's valuation grade has moved from expensive to fair, indicating a more favorable assessment of its market position. The company is currently fairly valued, with a PE ratio of 9.96, an EV to EBITDA of 8.93, and a PEG ratio of 0.17, suggesting strong growth potential relative to its price.

In comparison to its peers, Riddhi Steel's PE ratio is significantly lower than that of JSW Steel, which stands at 50.26, and Tata Steel, which is rated attractive with a PE of 39.87. Additionally, Riddhi Steel's ROCE of 10.65% and ROE of 13.26% reflect solid operational efficiency. Notably, while the stock has underperformed year-to-date with a return of -28.57% compared to the Sensex's 3.39%, its strong performance over the last three years, with a return of 203.53%, highlights its potential for recovery and growth in the long term.
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